Stocks climb back after steep slide on Fed, Ukraine jitters

A late-day buying spree pushed the benchmark S&P 500 index to a 0.3% gain after pulling it out of so-called correction territory — a drop of 10% or more from its recent high.

Early in the day, benchmark stock indexes flirted with near 4-month lows as investors anticipated guidance from the Fed later this week about its plans to raise interest rates to tame inflation, which is at its highest level in nearly four decades. Investors are also keeping an eye on developments in Ukraine. Tensions soared Monday between Russia and the West over concerns that Moscow is planning to invade Ukraine, with NATO outlining potential troop and ship deployments.The Dow rose 99.13 points to 34,364.50. The Nasdaq gained 86.21 points to 13,855.13.

Higher interest rates tend to make shares in high-flying tech companies and other expensive growth stocks relatively less attractive. Tech stocks accounted for much of the S&P 500's early slide. The sector ended up higher overall, though some big names didn't recover entirely. Apple fell 0.5%. When the Fed boosts its short-term rate, it tends to make borrowing more expensive for consumers and businesses, slowing the economy with the intent of reducing inflation. That could reduce company earnings, which tend to dictate stock prices over the long term.

Europe’s STOXX 600 index closed down 3.6% on concerns about Fed tightening and worries about the situation around Ukraine. The Russian ruble has also fallen after U.S. President Joe Biden indicated that in the event of a Russian invasion the U.S. could block Russian banks from access to dollars or impose other sanctions.

The stock market is not the economy.

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